2016: Equal Employment Opportunity Commission (EEOC) released final regulations under Title I of the ADA and Title II of GINA regarding wellness programs.

Regulations apply to any participation-based and/or outcomes-based programs that include disability-related inquires and/or medical examinations (no medical exam or disability inquiry, no problem)

ADA and GINA regulations limit the maximum reward or penalty for employee or spouse participation to 30% of the total cost of self-only coverage

30% limit includes financial rewards and in-kind incentives, and there is no “de minimis” rule for cast or non-cash incentives

2017: AARP sued EEOC, arguing the 30% limit could be a significant cost to employees and the 30% of the total cost of coverage penalty or incentive makes the program involuntary

Court asked EEOC to justify the 30% limit, but the 30% limit was deemed “arbitrary and capricious.”

2018: Court indicated the 30% limit portion of EEOC regulations shall be vacated as of 1/1/2019.

It’s up to the EEOC to issue new guidance or do nothing by 1/1/2019.

These regulations only apply to wellness programs requiring the completion of a medical exam and/or responding to disability-related health inquiries.

 

What could happen?  We present speculation from various sources.

Employers could eliminate incentives for health screenings while waiting for new guidance.[1]

Without ADA incentive limit rules, employers may feel free to raise participatory wellness program incentives to 100% of the employee’s premium cost. [2]

Outcomes-based programs are just about done, as they typically require four-figure penalties or incentives to drive participation. This assumes the EEOC will lower its incentive/penalty percentage with new or clarified rules. [3]

If the old rules are vacated by 1/19, employers trying to figure out how to create a voluntary wellness program are flying blind. [3]


Sources

[1] Jim Pshock, "Recap from the January 30th Webinar," Bravo, 2 February 2018, https://www.bravowell.com/2018/02/02/recap-january-30th-webinar

[2] Barbara Zabawa, "Wellness Incentives are Not Dead Yet: Potential Outcomes from the AARP v. EEOC Order," Shortlister, 11 January 2018, https://blog.myshortlister.com/2018/01/11/wellness-incentives-are-not-dead-yet

[3] Al Lewis, "AARP v. EEOC: On the Contrary, it is Almost Time to Panic," Shortlister, 1 February 2018, https://blog.myshortlister.com/2018/02/01/aarp-vs-eeoc-on-the-contrary-it-is-almost-time-to-panic

[4] Andie Burjek, "How Employers Can Shift their Wellness Program Plan Design Under Changing Regulations," Workforce, 31 January 2018, http://www.workforce.com/2018/01/31/employers-can-shift-wellness-program-plan-design-changing-regulations/

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